The craziness continues today. Weird to say that the 100%+ premarket move in Support.com (SPRT) didn't shock me this morning. Okay, it shocked me a little bit. I thought we'd see a greater than 65% move the options priced in but I didn't think we'd see it a day later. I had weeks for it to happen given it is a September expiration. This is precisely what FOMO plus a short squeeze looks like.
Now, we're seeing the secondary plays catch bids on one of the last summer Fridays of the season. In my experience, few of those plays will reach the same outer space levels as SPRT, but SPRT is five days into a move. Today's nearly 200% gain is on top of an already existing 100% gain in a few days. About six weeks ago, this stock was struggling under $5.
So now we'll see copycat trades. Flippers and scalpers searching for the next big short-squeeze. They will check out companies in the same sector as SPRT, same country origin, same short interest size (or bigger), and same market cap area. I'm not saying there is anything wrong with that. Heck, it's what I would do. It's why I was tweeting out views on Vinco Ventures (BBIG) this morning. The stock fit many of the same criteria as SPRT. I wasn't alone on this nor was I first. If you didn't catch it in the premarket, it required a chase, but at least the chart was pretty clear to follow. We often don't get that fortunate.
I still think scaling out on these big moves, at least partially, is the way to play things.
Olo (OLO) is another name where I'd consider taking profits. This was a trade that has run hard, but given the sharp rejection from $49 today, profit takers may come into play. While markets continue to look good, I do get nervous when the small names start this craziness, especially as we head into a weekend filled with political tensions. No, I'm not shorting, but I'm pulling in some profits where I have them and keeping stops very tight.